August 18th, 2025

On August 5, 2025, a crowd of Brooklyn homeowners gathered at Borough Hall to protest New York City’s Local Law 18. The law, in effect since September 2023, imposed strict limits on short-term rentals (i.e. rentals less than 30 days), including: (1) a requirement that hosts be present during guest stays, (2) a maximum of two guests, and (3) mandatory registration with the Office of Special Enforcement. Homeowners said rules imposed by Local Law 18 slashed rental income, made many listings unworkable, and threatened their ability to cover mortgages. They called for legislative change through Intro 1107, amid a new poll that suggested most New Yorkers were open to revisiting the law.

That poll, released by the Brooklyn Chamber of Commerce and reported by amNewYork, found that 78% of residents believed the ban should be reconsidered or were open to changes. It also reported that 95% of respondents felt New Yorkers need more adaptable options to help manage the cost of living in the city. Tenant advocates in the “Tenants Not Tourists” coalition disputed those results, citing a June survey that found 56% opposed loosening short-term rental restrictions. The conflicting data shows the public remains divided and raises questions about whether there is a clear consensus on the future of short-term rental laws.

Despite a nonconforming census, NYC Council Introduction 1107 (“Intro 1107”), sponsored by Council Member Farah Louis on November 13, 2024, seeks to amend Local Law 18. It would allow up to four adult guests plus children to stay in owner-occupied homes and remove certain access requirements. Supporters of Intro 1107 said this could restore critical income, while opponents warned it may worsen the city’s housing shortage. The bill currently sits in the Committee on Housing and Buildings, awaiting further action, with no public hearing scheduled at this time.

For mortgage servicers, tighter restrictions on short-term rentals reduced borrower repayment capacity, particularly for those who relied on supplemental rental income to meet monthly obligations. Lower cash flow increased delinquency risk in certain loan portfolios, especially in neighborhoods where owner-occupied short-term rentals formed a significant part of household income. If adopted, Intro 1107 could ease some of these pressures by allowing more guests and removing certain occupancy restrictions. This could stabilize borrower income streams and reduce default risk. It could also introduce new variables for portfolio forecasting.